3RD UPDATE: More Disruptions Ahead As Heathrow's Terminal 5 Struggles
Dow Jones

LONDON (Dow Jones) -- British Airways cancelled a fifth of all flights from its new Terminal 5 on Friday, causing more headaches for passengers a day after the collapse of the facility's luggage system marred the opening of the 4.3- billion-pound ($8.6 billion) terminal.

The carrier's chief executive also warned of further disruptions Saturday.

"Yesterday was definitely not British Airways' finest hour," Chief Executive Willie Walsh said in a statement Friday. "We disappointed many people, and I apologize sincerely. I take responsibility for what happened. The buck stops with me."

Europe's third-largest airline has for months been telling passengers the new terminal would put an end to "Heathrow hassle," a phrase coined by travelers exasperated with creaky infrastructure, endless lines and lost luggage.

Opening day Thursday failed to deliver. By early evening, British Airways had to turn away all passengers who wanted to check luggage because the baggage system couldn't cope.

Travelers flying into the terminal weren't any luckier, often waiting several hours for their bags to appear.

Escalators stopped working, staff didn't know how to operate machinery, and only a portion of the check-in counters were opened.

In the end, British Airways had to cancel 33 flights Thursday to ease delays. Those cancellations extended into Friday.

As U.K. media published a flurry of front-page articles about the "Heathrow farce," British Airways' shares fell 2.8% in London afternoon trading. Shares of Grupo Ferrovial SA , the Spanish infrastructure giant that owns Heathrow operator BAA, lost 2.2% in Madrid.

Much-tested luggage system fails

While many factors combined to create the meltdown, the luggage system seems largely to blame. That was a surprising development, considering the special attention given the system during the terminal's development.

In an interview late last year, British Airways' head of T5 development Jonathon Counsell told MarketWatch that he was well aware that the luggage system would be absolutely crucial to the smooth running of operations on day one.

Executives in charge of the project, he said, were very mindful that it was a failure of the luggage system that made Denver International a case study in how not to open an airport.

But Counsell emphasized at the time that, given the extensive testing of the system at T5, passengers wouldn't be treated to scenes of strewn luggage in London.

That wasn't the case.

British Airways apologized for the delays and disruptions in a statement issued overnight, but stopped short of admitting that things had not gone to plan.

"We always knew the first day would represent a unique challenge. A number of early problems grew during the course of the day, which led to significant disruptions for our customers," Walsh said in that overnight statement.

"I am very sorry that the problems meant that some of our customers did not experience the true potential of this amazing building," Walsh said.

Around lunchtime Friday, a new, more apologetic statement was issued in which Walsh admitted that the opening was not "British Airways' finest hour."

Walsh tried to reassure passengers that the company was working hard to fix the remaining problems. He warned, however, that "some disruption" would likely remain Saturday.

The airline blamed the problems on a combination of factors, including delays at the staff parking lot and at security, as well as log in problems for baggage handlers reporting for duty. The statement suggested the issues could be sorted out quickly and weren't systemic in any way.

"There were problems in the car parks, airport areas, computer glitches and the baggage system," British Airways said.

  (END) Dow Jones Newswires
  03-28-08 1419ET
  Copyright (c) 2008 Dow Jones & Company, Inc.
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